Publication - Advice and guidance

Coronavirus (COVID-19) local restrictions grants: local council and enterprise agency guidance

Published: 14 May 2021
Last updated: 21 Jul 2021 - see all updates

Information for local councils and enterprise agencies on financial support for specific businesses impacted by the decision to retain restriction levels.

Coronavirus (COVID-19) local restrictions grants: local council and enterprise agency guidance
Soft play businesses

Soft play businesses

Information in this document is provided by the Scottish Government, in conjunction with the Convention of Scottish Local Authorities (CoSLA), to Scottish local authorities.

This payment is intended to recognise the enhanced Covid-19 restrictions in place for indoor soft play businesses in Scotland requiring them to close for much of the pandemic compared to across the rest of the UK which have been able to open and operate, and recognising the impact of Protection Level 1/2 restrictions on centres in different local authority areas.

This funding will be made available through powers conferred by Sections 126 and 127 of the Housing Grants, Construction and Regeneration Act 1996.

This document has no statutory basis, is offered without prejudice to relevant legislation and legal decisions, and does not constitute legal advice.

The document aims to inform a mutual understanding amongst local authority practitioners engaged in the administration of these payments. It includes specific information relating to this financial support.

Given their responsibilities for managing public funds, it is for local authorities to ensure that procedures for administering the payment are suitably robust, including due diligence to mitigate fraud and for audit purposes.

Local authorities are expected to seek recovery of overpayments including pressing criminal charges where necessary, if fraudulent claims are found. Local authorities will not be held financially liable for overpayments associated with fraud and error. The exception to this would be circumstances where a local authority is found to be materially not compliant with the relevant UK Government fraud control guidance.

How payments to soft play businesses will be provided

Local Authorities will administer this payment and will be responsible for delivering the funding to specified eligible businesses. The Scottish Government will fund local authorities to make these awards.  Local authorities should align this additional payment process with the existing retained infrastructure for the Strategic Framework Business Fund, where possible.  Local authorities are asked to process this one-off payment to eligible businesses by the end of July 2021.

This grant support will be payable as one lump-sum.

Eligibility for support through this fund is predicated on whether a soft play business has previously been in receipt of financial support through the Strategic Framework Business Fund.  Co-design of this grant with sector representatives has identified all [81] eligible businesses  -  spreadsheet attached – allowing local authorities to make payments using bank details already held. As such local authorities are not therefore required to set up a separate application process for this fund. 

Our preference is for payments to be made into Business Bank Accounts although payments into personal bank accounts are permissible where local authorities are able to verify that the account is used for business purposes. 

Due diligence, monitoring and reporting requirements

The Scottish Government will require local authorities to supply agreed management information on the number of eligible businesses; awards made and the number of and amounts of actual payments made.

The first management information, including number of businesses supported and value of awards made will be requested on 27 August for a response by noon on 31 August 2021, with final information requested in September.  It is important that the management information provided should be accurate and reflect the position as at 27 August 2021.

One-off payments for soft play businesses

Following discussion with sectoral representatives, grant payments are graded based on whether a soft play business was subject to Protection Level (PL)1 or PL2 restrictions from the 5th June 2021. Soft play centres in local authority areas currently subject to PL2 restrictions, and which are therefore closed, are eligible for a higher level of award than those in a PL1 area.

Award Levels for Businesses in Local Authority Areas in Protection Level 1 on 5th June 2021

Soft play businesses that meet the eligibility criteria and are located in an area subject to PL1 restrictions on 5th June 2021 will receive a one off payment of:

  • £3,500 for premises with a Rateable Value below £51,000; or
  • £5,000 for premises with a Rateable Value of £51,001 or over

Award Levels for Soft Play Businesses in Local Authority Areas in Protection Level 2 on 5th June 2021

Soft play businesses that meet the eligibility criteria and are located in an area subject to PL2 restrictions on 5th June 2021 will receive a one-off payment of:

  • £9,000 for premises a with a Rateable Value below £51,000
  • £14,000 for premises with a Rateable Value £51,001 or over

Eligibility criteria

To be eligible for financial support through this fund the business must be an indoor pay to play soft play centre which under the Health Protection (Coronavirus) (Restrictions and Requirements) (Local Levels) (Scotland) Regulations 2020 (as amended) is required to close at PL2 and above.

Additionally, only premises/businesses listed in the attached spreadsheet that have previously received financial support through the Strategic Framework Business Fund are eligible for a grant through this scheme. 

Soft play centres must have separate 'pay to play' charges (for clarity, this payment is not available to businesses that have a courtesy soft play area for customers i.e. car showroom, restaurant, airport, dentists waiting area, or is free to use as part of a larger entity etc.)

Additional eligibility criteria

Businesses which have breached wider COVID regulations/requirements should be excluded from support through this fund.

It is for a local authority to determine if a business meets the description and further information can be requested, where necessary, to determine eligibility. 

Subsidy control considerations

Applicants are required to declare all previous support received from UK or Scottish or Local Government support schemes to provide local authorities with the necessary information to ensure payments are made correctly and compliant with EC State Aid and subsidy control limits.

The EU State Aid rules no longer apply to subsidies granted in the UK following the end of the transition period, which ended on 31 December 2020. This does not impact the limited circumstances in which State Aid rules still apply under the Withdrawal Agreement, specifically Article 10 of the Northern Ireland Protocol. The United Kingdom remains bound by its international commitments, including subsidy obligations set out in the Trade and Cooperation Agreement (TCA) with the EU. See BEIS guidance for public authorities explaining the subsidies chapter of the TCA, World Trade Organisation rules on subsidies.

The Council will need to ensure that any funding awarded after 31 December 2020 is compliant with the UK’s international commitments arising from membership of the World Trade Organisation or through the UK’s various Free Trade Agreements, including the UK-EU Trade and Cooperation Agreement. Further guidance on the application of these agreements is provided by the Department of Business, Enterprise, Innovation and Skills.

Additional payment for soft play businesses - tax implications

Grant income received by an individual or business is taxable. Awards under this grant will need to be included as income in the tax return of the individual or business.

Only individuals or businesses that make an overall profit once income is included will be subject to tax.

Payments will fall into the 2021/22 tax year. Unincorporated businesses will be taxed when they receive the grant income.

Guidence for businesses

Guidance is also available for businesses.


First published: 14 May 2021 Last updated: 21 Jul 2021 -